Dr. Joshua Boger is a businessman — and a very successful one. But he based his career on a rejection of the notion that profit for stockholders must be the ultimate and only purpose for a business enterprise. Flying directly into the headwind of predominant business thinking, Boger dared his board and his company to put people first, and to choose to make the transformation of human life through medical advances the company’s over-arching goal.
At the Alliance’s Fall CEO Summit, Boger offered the company he founded, Vertex Pharmaceuticals, as a vivid example of the conference theme of “Shared Value Creation.” Vertex’s strategy is based on a rejection of economist Milton Friedman’s pronouncement that “few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
Boger points out that the Massachusetts statute laying out the responsibilities of a company’s directors encompasses a much more balanced and inclusive view of what is in a business’s interest — very much in keeping with the view of the founders of Massachusetts, who chose to envision the state as a Commonwealth.
“In determining what the director reasonably believes to be in the best interests of the corporation, a director may consider the interests of the corporation’s employees, suppliers, creditors and customers, the economy of the state, the region and the nation, community and societal considerations, and the long-term and short-term interests of the corporation and its shareholders…”. (Mass. Ch. 156D, Sec. 8.30)
If anyone has been wondering why Vertex is not incorporated in Delaware like so many others, Boger said, it’s because the company’s founders wanted Vertex to be a contributing member of a Commonwealth.
For the first time, Boger shared Vertex’s business strategy map which identifies profitable operation not as the end point of the strategy, but as the engine which propels the achievement of the business’s core purpose.
Boger’s company built its business strategy from this simple premise into an action plan that incorporate’s the company’s values into every aspect of its operations. Boger was inspired by the approach of George Merck, founder of Merck Pharmaceuticals, where Boger began his career: “…We try never to forget that medicine is for the people. It is not for the profits. The profits will follow and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been…”.
From this basis, Vertex became one of Massachusetts’ fastest growing companies, and a concrete demonstration that business success and social values can work hand in hand to benefit shareholders and community alike.
Boger also showed that this approach translates well to the non-profit world by sharing the strategy map of Wesleyan University, where he chairs the Board of Trustees. Putting financial stability at the bottom of the map, where it supports everything else, makes clear the relationship between finances and the ultimate goal of a university — in Wesleyan’s case, “to provide a transformative liberal arts education that inspires a lifelong commitment to learning, leadership & service.”
Boger recommended to the business innovators and investors assembled at the Alliance conference that they reject the limited, single-minded approach to profits, and consider them instead as a means to a greater goal: a better world for all of us.
To learn more: Dr. Boger’s PRESENTATION to the Alliance Fall CEO Summit, Oct. 23 2013